Top Investors Reveal Best, and Worst Advice They Got

Over the next few posts I will include some great feedback from some very successful property investors in regards to the Best and Worst Advice they received when starting down the path of property investment. Straight from Your Investment Property Magazine, these articles are well worth the read if you are considering the allure of property investment as a viable alternative to a government pension in retirement!

Confused about what to do next? Your Investment Propertygrilled Australia’s leading investors to discover what line of thinking helped them and what held them back

Property investors are currently overwhelmed with choices and overloaded with information – if you’re confused, you’re not alone.

That’s why we turned to the experts for advice – specifically, for the best advice they’ve ever received as well as the worst advice they ever got.

Their answers are wide and varied, but it seems that one prevailing theme ran through: the right attitude and a positive mindset.

Michael Yardney, director, Metropole Property Strategists

Best advice: Treat your property investments like a business

Worst advice: Property investment is easy

Over the years I’ve seen a small group of property investors, those who treat their investments like a business, become very, very rich by growing a multi-million dollar investment property portfolio. They do this understanding “the system” and getting the right type of finance, setting up the correct ownership and asset protection structures and knowing how to legally use the taxation system to their advantage.

Let’s face it; the majority of Australians will be always be employees but we all have the ability to become financially free by becoming property investors who treat their investments like a business. And you can set up your own property investment business while you are still an employee or self-employed.

In fact, that’s what I did and what almost every wealthy property investor I know has done.

They built their wealth by growing their real estate portfolio one property at a time. While this was going on they lived off the income they earned from their day job. They started off with one property, then leveraged off its capital growth to invest in another and another until one day they found themselves with a true property investment business.

Worst advice

I was told that property investment is easy. This was clearly wrong because most property investors fail!

Look at the facts – 50% of those who get into property investment sell up in the first five years and of those who keep their properties, the vast majority never end up owning more than one or two properties. This means they don’t ever achieve the financial independence they desire.

However over the years I found property investment is simple, but not easy. And that’s not a play on words.

It’s simple if you follow a proven formula but it’s really hard to become wealthy in property if you do what everyone else is doing. While many investors chase cash flow or the next hot spot, I’ve found successful investors build their asset base.

Over the years I have developed a four stranded strategic approach to property investment that ensures the properties I buy a property will outperform the market averages.

I buy a property below its intrinsic value.

In an area that has a long history of strong capital growth

I look for a property with a twist – something unique or special or different or scarce about it.

And a property where I can “manufacture capital growth” through refurbishment renovations or redevelopment.

This means I minimise my risks and maximise my upside as each strand represents a way of making money from property and combining all four is a powerful way of putting the odds in my favour. If one strand lets me down, I have two or three others supporting my property’s performance.

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